17 June 2008

The Time to Act?

Bob has done a good job of debating all comers in this post, but I think he's using an invalid method of argumentation that deserves a post of its own, i.e., he says:

David answered: Everything's possible and a function of risk and uncertainty. Given that uncertainty is playing a big role, I'd prefer to act and regret it than not act at all -- ie, the precautionary principle.

Well, then really what you're saying is no, you will never regret your current support for climate legislation, regardless of how the future unfolds.

Given that your current position is literally non-falsifiable, I don't think there's much point in us continuing this discussion.

Perhaps it is not worth making falsifiable statements about what will be true in 10-20 years when the action must be taken now. As you mention in your second comment, I have decided I am pro-(smart)-intervention now. Fine.

When would you make up your mind to do anything except nothing?

Let me use another analogy: Would you prefer to save for retirement over the next x years or just assume that you will be dead in x years, so it doesn't matter? I prefer to save: Even though I may be dead, I may not be and then I'd like to have some retirement income.

Bottom Line: Falsifiable statements (and argumentation that hinges on their empirical testing) are only useful when the answer arrives in a timely fashion. The scientific consensus is that global warming/climate change is happening and will get worse. Rather than hope that the consensus is wrong, it's a good idea to adopt and adapt policies that will reduce change and mitigate the harm from it.

17 comments:

If my position really were the one to which you're responding in this post, then you would be right and I would be an idiot. But hopefully, I will now show you that that's not my position. :)

Let me reiterate the casino analogy: If you're playing Blackjack and you have an 11 versus the dealer 6, then the "correct" move is to double down. Even if you end up losing, you won't regret what you did, because it was the best information you had at the time.

That is NOT what I'm saying here. I am not asking you, what the temperature would have to be in 2025, in order for you to slap your forehead and say, "Oops!"

Let's concede all the IPCC science. Even so, I don't understand how you, as a self-described free market libertarian, can hope that the US federal government will get this one right.

You say:

The scientific consensus is that global warming/climate change is happening and will get worse. Rather than hope that the consensus is wrong, it's a good idea to adopt and adapt policies that will reduce change and mitigate the harm from it.

So my position is that the US government will NOT "adapt policies that will reduce chage and mitigate the harm from it."

All of the buzz in Washington is a big mirage in order to make Americans think the government is doing something, when really it is just redistributing trillions of dollars and won't even significantly alter world emissions.

I realize my discussion of the climate models may have given the wrong impression, but I am NOT merely saying, "We can't be certain, so let's wait."

Rather I am saying, "Even if the IPCC projections are right, we as economists know that the government often fails to make a situation better. So let's be really careful before supporting another federal 'war' on the bogeyman du jour."

Because I'm a spammer, or because some people might not see the older thread (most comments on one of your blog posts ever, david_zetland?), here is a link to bob's handling of my several criticisms, which now includes my response. Maybe one day we'll see eye to eye!

Well, I agree that it's a useful place to start, but I am forced to trust gov't as the only channel for improvement wrt GW.

I don't think so. This is not the place to go into a full-blown description, but there are lots of policy recommendations that you could make as an economist concerned about climate change.

For example, you could call for true deregulation / privatization of utilities. Right now people waste electricity because they don't pay market prices. (Similar to your position on water, right?)

Privatize the roads, then people won't sit in traffic jams in big cities, spewing tons of needless CO2 into the atmosphere.

Pull the troops out of Iraq, and reduce the Pentagon's carbon footprint.

See? I am not advocating a do-nothing approach. I am saying I personally am quite convinced that expanding government in order to beat "market failure" will not work. You aren't even disagreeing with me. But since you don't see any alternative, you tacitly support what you (apparently) know will fail.

Look, this isn't simply a matter of principle. If there is a humongous drain of resources into the government, and STILL global emissions grow unchecked, then Rush Limbaugh et al. will use that against future agitation on the issue.

If you really think governments have to do something about climate change, then you should want to make sure they get it right. And yet it seems most environmental economists prefer cap & trade to status quo.

Bob_Murphy's position on government involvment (as mentioned several times elsewhere including the above link to my response) faces problems of its own, very similar to the falsifiability issue: he cannot name some kind of policy change he could favor, making policy debates with him kind of pointless. He cannot name a universe with a policy he favors.

Bob_Murphy has reasoned that because government "won't get anything right", any proposed policy will just get distored to the point where it's harmful.

But let's say one day the "government is wasteful and stupid" meme becomes popular (as concern over AGW has) and people kick around ideas about massive cuts in its scope, to much praise. I could take Bob_Murphy's exact reasoning and say, "but wait! Do you REALLY trust politicians to get this right? It'll just get watered down in committee, and ultimately sneak up and INCREASE the scope of government!"

And just to put this in context, this is exactly the same kind of "I oppose any change whatsoever" mentality wesawwithLaurenceVance and, yep, Bob_Murphy too! (Note the "Person" comments in the first few links.)

It's basically arguing against all policies by subtly shifting between the topic of "which policy is good" and "which policy will get implemented".

The correct response is to say:

-Here is what we need to do, using the most efficient way.-Here are the transparency safeguards we need to make sure the policy actually happens.-Here is the deviation from that, that we can tolerate.-I oppose any policy failing to meet that, on the grounds that it's worse that the problem it addresses.

(btw, no easy way to enter this in as my profile, so I'll just post it here: my email is sbartaDONTSPAM@MEgmail.com)

@Bob, you already forgot one of the first things I said on your Norhaus paper. Here it is again: "Second, almost everything I see written about GW proposes some sort of penalty (taxes, caps, etc.) to reduce GW and the activities that contribute to GW. I'd love to see some easier steps taken first, e.g., ending subsidies for fuel (e.g., Iran, Venezuela, India, Indonesia) and GW-inducing activities (e.g, driving in the US)."

Happy?

I am talking about actions taken AFTER pulling the low-hanging fruit, i.e., international gov;t coordination on GW.

Wow, I feel bad now. I said all that, and I didn't even respond to Bob_Murphy's latest comments, which beg me to answer them!

Bob_Murphy: Your list of suggestions reminds me of some of the stuff in Gene_Callahan's GW essay, which, by the way, I wasn't impressed with either, but didn't have the time or patience then to respond in full.

Your ideas are GREAT! Seriously. But they are not in any way, responsive to the concerns about AGW and its impacts.

Why? Because every wasteful government policy you ditch, every good you finally bring a market price to, every energy input you shift back the short-run demand curve for ... does what? What do all of these things do? What is so freaking wonderful about all of them?

That's right: they MASSIVELY INCREASE ECONOMIC GROWTH. And what predictably increases right along with economic growth? Oh yes, consumption of fossil fuels! If the Pentagon doesn't blow all that oil today? Joe Entreprenuer * a zillion will use it -- toward actual consumer desires -- tomorrow!

So, you haven't listed things that "do something" about CO2 externalities; you've listed things that increase them, and STILL without making fossil fuel prices reflect those externalities!

(This is what part of my reply to Gene_Callahan would include if I had responded back then.)

Bob_Murphy: Your list of suggestions reminds me of some of the stuff in Gene_Callahan's GW essay, which, by the way, I wasn't impressed with either, but didn't have the time or patience then to respond in full.

Before I forget, I just want to clarify to any innocent bystanders that Silas is NOT quoting me above. I.e. that is Silas ripping Gene Callahan (a frequent co-author with me), not me (Bob Murphy). In fact, I advised Gene on the piece in question.

But help me figure this out here. Bob_Murphy just listed some positive changes he advocates (or, uh, believes economists should advocate?), which he believes suffice as evidence that his libertarian position adequately addresses the problems CO2 poses. He did not once mention Gene_Callahan in that comment.

Then, I demolished* those claims, while mentioning Gene_Callahan only in passing, and Bob_Murphy acts like my criticism is only applicable to thinks Gene_Callahan said. Amazing!

So if Bob_Murphy won't respond on that, why don't you instead hold his feet to the fire? Don't you agree it's a valid crticism?

*I don't use that term lightly, and I don't do it to brag. Citing the things Bob_Murphy did as solutions to the CO2 dumping problem is pitifully bad, almost on the level of claiming that CO2 permits can't reflect economic scarcity.

The global economy, even with rampant statism, will of course grow and grow and grow into the future. With growth, comes demand for fossil fuels. Citing this or that government policy which, God forbid, uses oil omg!, is about as non-responsive as you can get. If government isn't blowing that oil now, total global use will replace it later. The argument amounts to saying "Hey, don't worry -- in a free world, the apocalypse will happen later."

It is the same error as the anti-IP folks who say, "Of course we could have wonderdrugs without patents -- it's only that evil FDA that drives up development costs!" Wrong, because pharma development costs increase on their own because of reasons fundamental to the nature of reality (goal oriented beings grab the lowest-hanging fruit first). So even without the costs the FDA tags on, some day, development costs will get that high. Then how does the patent-free world give us wonderdrugs?

It's the same error that Kevin_Carson and the anti-Lockean whiners make when they say that worker oppression exists because all that land is getting held out of their reach. Wrong: population growth will inevitably make it so that the universe one day would contain the same available land per worker as there is today, even if you liberated it all. Then what's your explanation for worker oppression?

Silas: So, I think that you are saying that constraints are useless because solutions to constraints will keep the GDP growth party going -- undoing any reductions in pollution/unit. Is that right?

I am not a big fan of the GDP is everything crowd, so I have some sympathy for this critique, and I think that consumerism is a real problem -- a problem that is somewhere artificially induced.

I'm not sure if this is what you are saying, but I am all for simple, sustainable lives. Perhaps the only way to convince others that this is a good idea is to tax the hell out of them, lock them up, or make them live in a planned economy.

@david_zetland: I think that you are saying that constraints are useless because solutions to constraints will keep the GDP growth party going -- undoing any reductions in pollution/unit.

I don't know how to answer this, because I can't figure out what "constraints" means in this context. I will, however, do my best to clarify what I did mean.

I believe that only when the environmental costs are contained in the prices of fossil fuels, and those funds "undo" the problems they cause, can there be a long-term ("sustainable", though I don't like what that term has come to mean) solution.

I critiqued the things Bob_Murphy listed on the grounds that they simply eliminate some currently-wasteful use of oil, without fundamentally changing the incentives surrounding a person's decision to buy another unit of oil; and that they furthermore supercharge the very economic growth that encourages people to use oil et al.

They therefore leave the world with more fossil fuel use, and no correction of the resultant problems. IOW, it's not just the "getting back to the same level", but also that "the 'consumption' of the atmosphere is still not priced in".

Which is, incidentally, why I've been very dissatisfied with Bob_Murphy's work: he never provides a general solution to the problem, i.e., how to handle the tragedy of the commons in a resource that already has so many legitimate homesteading claims to it.

Oh -- you want the price of a resource to reflect its full cost? No problem -- we agree....

(In fact, I think that most economists, including Bob, would agree.)

That's why I back a carbon tax...

Now, there is a pragmatic issue of where to set that tax. Set it too low and you get to omuch consumption. Too high, and you get too little (and that CAN be bad if it directs behavior somewhere else that's NOW less sustainable, e.g, nuclear). Setting the tax is really alchemy, so I pretend that we can get there "somehow" :)

david_zetland: With all due respect, I get the feeling you don't read ... some of my comments, and it's not just because of this thread, but also my earlier exchanges with Bob_Murphy, where you would reply to me in generalities which, while true, didn't seem to be the result of any specific points I made.

Yes, I think the price of a resource should reflect it's full cost (not in the "labor theory of value" sense but you get the point). But that's not all, and it's not what has me making these comments just now. The point I was making to Bob_Murphy was that, *unless* prices incorporate these externalities, and are applied to mitigating them, general economic growth will eventually increase the load on the "commons" to point that it more than replaces whatever current wasteful oil use you want to criticize today.

Bottom line: it's no good to talk about how you want to eliminate the Pentagon's or traffic jams' oil wasting, which is what Bob_Murphy, Gene_Callahan, and countless confounded libertarians want to do. These ideas are great, but completely orthogonal to the problems of global warming.

(See? Now I'm starting to become like you! Now maybe if I could just ditch those underscores...)